The real question is whether MFIs are really helping small entreprenures to run their business, or do such borrowers really invest funds so received from MFIs to run their business and increase wealth? Though I have not formally studied the issue, my own understanding (built on the basis of informal conversation with such borrowers) is that the funds are used for personal or customary purposes in a large number of cases, and diversification of funds is common among small borrowers. It is also observed that to repay one loan, they take another loan and so on. The cost of funds is also too high, the reasons are many, but to list a few: Illiterate customers, middle men taking huge commission, corruption, window dressing cost much.... MFIs are aggressive in marketing, and to garner business, products are sold like detergent through offering incentives & schemes. There is a real need to evaluate the net value addition through micro loans.